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Tuesday, June 7, 2016

Key things FM said in his meeting with PSB heads

Finance Minister Arun Jaitley

FINANCE Minister Arun Jaitley on June 6 met CEOs of public sector banks to discuss various key challenges facing the banking sector including growing non-performing assets, a day before RBI Governor Raghuram Rajan takes a call on key rates in the the monetary policy.
“I had a meeting with PSB heads and we discussed various suggestions to empower banks,” FM Jaitley said. “The key discussion topics... were credit flow, NPA position and banks expansion,” he said.
Here are some highlights of what he said during the meet.On merger of banks, Jaitley said the government as of now is looking only at SBI merging five subsidiaries as well as Bharatiya Mahila Bank with itself and a decision on this will be taken soon.
“We are looking at SBI proposal at the moment. It is with the government to respond. I have indicated that in the budget itself. “We are expecting approval shortly."The cumulative losses of Rs 18,000 crore suffered by PSBs last fiscal were mainly on account of higher provisioning for bad loans.
PSBs actually made operating profits of Rs 1.40 lakh crore in 2015-16, he said, indicating that their performance was not as bad as being projected.Government is fully committed to supporting banks; Insolvency and Bankruptcy Code will become operational very soon.
It is on account of the provisioning that overall the PSBs declared a net loss of about Rs 18,000 crore and a significant amount of provisioning having been made in the last two quarters of the fiscalDiscussed progress of UDAY Scheme. UDAY scheme has been reasonably successful
Government firmly believes that the NPA situation has arisen on account of certain sectoral debtsNo discussion took place on bank recapitalisation in the meeting. The government has already committed Rs 25,000 crore capital, we are willing to do more.Earlier, Jaitley said government has sufficiently empowered the banks to recover their dues but added that they will have to maintain their credit lending facility so that lending for growth continues.
It’s an important function of the RBI. We do not comment on it before the RBI announces the policy.The economy is becoming stronger and wherever the gaps are, our effort now is to bridge them and achieve further growth.